Over at Project Syndicate Ten years ago we had ridden the bust of the internet bubble, picked ourselves up, and continued on. It was true that it had turned out to be harder than people expected to profit from tutoring communications technologies. That, however spoke to the division of the surplus between consumers and producers--not the surplus from the technologies. The share of demand spent on such technologies looked to be rising. The mindshare of such technologies looked to be rising much more rapidly. READ MOAR at Equitable Growth
Thus a decade ago we—or at least I—could look forward semi-confidently to more of the measured North Atlantic prosperity-frontier productivity growth rates characteristic of the 1950s, 1960s, and 1990s, and the fading of the anemic Nixonian 1970s and Reaganite 1980s into memory. Virtual experiences and information would become an increasing part of what we cared about and become essentially free. Stuff would become hyper-cheap. And capabilities would be pulled along in the gravity of the other two. Nearly all citizens of the North Atlantic would then find the material world, at least, to be a cornucopia.
How have we gone awry?
First, the virtual-experiences-and-information part is coming true. Gossiping with and about our imaginary friends, frenemies, and enemies; voyaging to and seeing things that may or may not exist; protecting our imaginary allies; and vanquishing our imaginary enemies--all of these dreams are becoming not just easier and cheaper to dream but the talent, skill, energy, and technology equipping us to dream more interesting dreams inspires and will continue to inspire ever-more awe. I have put it in a way to make you ask: "So what?" But since before Homer began to sing around the hearthfire about the wrath of Akhilleus and what followed therefrom, our dreams have been our primary recreation. It is one of the major things that wealth is for.
Second, the stuff-becoming-hyper-cheap part is coming true. Simply go to a WalMart, or a CostCo, or any of their analogues outside the United States and compare to a generation or two ago. The first consequence of the computer and communications revolution was to put every factory in the world cheek-by-jowl with its market, and thus to allow workers very far from California or New York State or Britain or Germany to bid for the business of making even sophisticated manufactures for the consumers of Los Angeles and New York City and London and Frankfurt. And the next consequence Will be the robotization of global manufacturing.
But even as the real prices of virtual experiences, information, and stuff have collapsed and continue to collapse relative to other scarce and desired commodities, value of human labor located in the North Atlantic has been going down as well. North Atlantic labor is and will be no longer valued so much for its location, its ability to move things with large muscles, its ability to manipulate things with small muscles, and even the ability of the half-a-shoebox 50-watt supercomputer that are human brains to serve as basic cybernetic components in process control loops. And this has meant that capabilities--in many cases the capabilities that are in the sea of middle-class status--appear and are increasingly out of reach for what may be becoming the bulk of the North Atlantic population. A job in which one is a valuable part of the useful production team that fits into a career. The ability to keep medical catastrophes from also becoming household financial catastrophes. A dwelling place that does not transform getting where you need to go into a huge shlepp. Affordable education for your children then give them opportunity for upward mobility. The bulk of the population, especially in the United States, greatly feels that our economy is vastly underperforming along this dimension of providing capabilities relative to what we confidently expected two generations ago.
For those who primarily value the virtual experiences, the information, and the stuff, modern North Atlantic society is a cornucopia, a paradise. And the same is true for those lucky enough to have been able to capture an inordinate share of the value created as abundance and politics have put enormous downward pressure on the rewards of labor. But for everybody else who primarily value the capabilities that are the indicia of what they used to think of as middle-class status? What they want to demand--although they really do not know it--is that their politicians and plutocrats figure out a way to connect and use hyper-cheap stuff and effectively-free information and virtual experiences to provide what are the key middle-class capabilities.